Tullow oil in financial troubles
27 July 2016
The Observer (Kampala)
Uganda: Tullow Oil Suffers 34 Percent Revenue Decline
Tullow Oil recorded a 34 percent drop in revenue in the last six months ending June 2016.
The oil and gas exploration and production group says its net debt at the end of June stood at $4.7bn. Tullow Oil chief executive Aidan Heavy says in a statement that revenue fell to $541 million during the period from $820 million in the first half of 2015.
The reduction in revenue has partly been attributed to lower commodity prices and reduced production in its Jubilee oil fields in Ghana. Tullow has suffered amid low oil prices, and is scrambling to shore up its balance sheet. The explorer recently announced a $300m bond auction.
However Aidan says Tullow is still well placed to move forward with a restructured and more efficient business than can deliver growth from its portfolio of high quality, low cost producing, and development and exploration assets.
In April 2016, Uganda President Museveni and his Kenyan counterpart Uhuru Kenyatta agreed to pursue separate crude oil export pipelines for the development of Kenya's South Lokichar oil fields and Uganda's Lake Albert oil fields.
The Uganda pipeline route is expected to go through Tanzania from Hoima to the Tanzanian port of Tanga. Total and the Government of Uganda are leading the pipeline development.
In Kenya, Tullow and its upstream partners Africa Oil and Maersk Oil, along with the Government of Kenya, are currently negotiating a joint development agreement to implement the Kenya crude oil pipeline, which will run from South Lokichar to the port of Lamu.
It is anticipated that for both the Kenya and Uganda pipelines, technical, environmental and social studies and tenders required will commence in the second half of 2016.
Tullow Oil suffers 34% revenue decline